Ethereum to Implement 'Pectra' Upgrade Today... Can It Rebound? [Hwang Doo-hyun's Web3+]

11 EIPs Applied… Significant Improvements in Staking and Account Abstraction

Expected to Reduce Validator Operating Costs and Innovate Wallet UX

"Providing User Convenience… Price Rebound Remains to Be Seen"

Ethereum (ETH), which has been under pressure due to continued bearish trends, will implement the large-scale 'Pectra' upgrade on the mainnet at 7 PM (KST) today. After surpassing $4,000 last December and then declining to the $1,800 range, the market is keenly watching to see if Ethereum can rebound with this upgrade.

Pectra is not an upgrade that fundamentally changes the structure like 'The Merge' or 'Shanghai'. Instead, it is an optimization-focused upgrade that enhances speed, scalability, and operational efficiency through 11 Ethereum Improvement Proposals (EIPs). Notably, five proposals are focused on improving the staking system, which is expected to contribute to network efficiency.

Enhancing Performance and Scalability… Aiming for a 'Global Settlement Layer'

Pectra is a key milestone in realizing Ethereum's vision of a 'Global Settlement Layer'. The strategy is to improve performance and enhance user experience while maintaining decentralization and security to process all transactions on-chain safely and affordably.

At the center of this strategy is 'The Surge' phase. This is the second phase in the roadmap aimed at enhancing rollup-based scalability and data availability, with Pectra acting as a crucial turning point in this phase. Through this upgrade, the Ethereum network will double the number of 'Blobs', which are transaction data storage spaces (EIP-7691), increase call data costs (EIP-7623), and standardize the blob schedule (EIP-7840).

The staking structure related to validators is also efficiently improved. The maximum limit that a single validator can stake is significantly increased from 32ETH to 2048ETH. Previously, to stake a large amount of Ethereum, multiple validator nodes had to be operated, but now a single node suffices, reducing operational costs and complexity.

Additionally, the authority for validators to exit the network on their own is expanded. Previously, exit requests could only be made through the network's 'consensus layer', but now they can also be executed in the 'execution layer' like a regular transaction, making staking and smart contract-based operations easier. Furthermore, the validator deposit process is simplified. Previously, deposits had to go through complex intermediate steps, but now they are processed directly in the execution layer, making the onboarding process for new validators more intuitive and predictable.

Account Abstraction in External Wallets… Significantly Improved User Convenience

The most noticeable change from a user perspective is the 'account abstraction' feature. Pectra includes the EIP-7702 proposal, which applies this to existing external wallets (EOA).

Until now, the wallets frequently used by Ethereum users were closer to simple 'electronic signature tools'. To use new features, a 'smart contract wallet' was essential, but this process was complex and had high entry barriers. EIP-7702 eliminates this inconvenience, allowing users to use features like account abstraction while maintaining their existing wallets.

In addition, fees can be paid with tokens other than Ethereum, and 'gas sponsorship', where a third party pays the fees, is also possible. As these features can be used in existing wallets without installing separate ones, user experience (UX) is expected to improve significantly.

Other detailed improvements for overall network performance include the optimization of BLS (Boneh-Lynn-Shacham) cryptographic signature operations (EIP-2537), simplification of consensus structure (EIP-7549), and standardization of communication methods between the execution layer and consensus layer (EIP-7685).

"Clear Technological Progress... Immediate Price Rebound is Uncertain"

Regarding the Pectra upgrade, Bok Jin-sol, a researcher at Populous, stated, "The ability to use account abstraction features in existing wallets through this upgrade will enhance user convenience," adding, "Improvements such as blob expansion and validator staking increase are positive in terms of enhancing validator operational efficiency."

However, there is also an opinion that an immediate market price rebound after Pectra is unlikely. Researcher Bok noted, "Ethereum's crisis is not merely a problem of deteriorating user experience but a complex issue involving the foundation's leadership vacuum, fragmented direction, and unresolved scalability issues," adding, "As the Ethereum Foundation has recently introduced organizational restructuring and a new leadership structure, it is necessary to closely monitor whether the crisis can be overcome in the future."

Global asset management firm Fidelity also stated in a report, "In a situation where the gap with competing chains is narrowing, Pectra is an important step for maintaining Ethereum's competitiveness," adding, "Given time, the popularization of Ethereum is possible." However, they also cautioned, "If it takes too long, user and developer attrition may accelerate," and advised, "Investors need to comprehensively review Ethereum's technical roadmap from a long-term perspective."